When looking at your pension transfer options, you may be wondering if you need financial advice. Clifford Osborne hold the Pension Transfer Gold Standard. Here’s more information on what that means and what to look out for if you’re looking for advice…

How do I find a firm adopting the Gold Standard?

Adopters will display the Pension Transfer Gold Standard ‘badge’ and can be found by searching the Money Advice Service directory.

Further information about the Pension Transfer Gold Standard is available here.

What is the Pensions Transfer Gold Standard?

The Personal Finance Society is the professional body for the financial advisory profession in the UK, whose role is to promote ethical behaviour, high standards of professionalism for technical knowledge and client service for the ultimate benefit of the profession and consumer alike.

It is part of the Chartered Insurance Institute, the world’s largest professional body dedicated to insurance and personal finance that seeks to ‘secure and justify the confidence of the public’.

Financial advice firms who adopt and promote this standard adhere to a set of principles. As a result you can be confident that you are dealing with an ethical adviser and professional advice firm that has your best interests at heart when receiving financial advice in relation to whether or not you should transfer your pension.

Pension transfers can be complicated and there are lots of things to think about before going ahead.

Seeking professional financial advice will help to ensure you are better able to make a fully informed decision that is in your best interests.

It is for that reason that the Government has made it a legal requirement to seek financial advice before you can transfer, if you have what’s called ‘safeguarded benefits’ – in particular if you are in a defined benefit pension scheme or have a guaranteed annuity rate – and your benefits are worth £30,000 or more.

This rule is there for your protection to make sure you are aware of all the pros and cons of transferring. The Pension Transfer Gold Standard is designed to help you recognise firms that will give advice that adheres to high professional standards.

The Pensions Advice Taskforce, a representative industry body set up by the Personal Finance Society*, has established a voluntary code of good conduct for Safeguarded and Defined Benefit Pension Transfers advice – the ‘Gold Standard’.

Financial advice is regulated in the UK by the Financial Conduct Authority (FCA) that already requires firms to adhere to some ‘core principles’, two of which are especially significant when it comes to complex pensions advice like pension transfers.

Clifford Osborne Limited will:

Should I move my safeguarded pension benefit?

Pension Transfer Advice is complex and can be viewed as expensive. It’s important you have enough understandable information about the generic advantages and disadvantages to enable you to decide whether to go on to take advice on the transfer or conversion of your pension benefits.

Firms adhering to the standard will ensure provision of this information ‘at arms-length’ so you are not under any undue influence in deciding whether to incur the subsequent cost of advice. You may sometimes hear this referred to as a ‘triage’ service.

Different Types of Pension Schemes

Below are a few statements which will explain some of the more common circumstances that cause people with safeguarded pension benefits to either leave those benefits where they are or to transfer them into a flexible pension.

Reasons some people give to leave their benefits where they are:

1. This pension will be my sole or primary source of income in retirement and the fact that it is guaranteed and has built in indexation is reassuring to me
2. I believe that I have a normal life expectancy so the fact that the pension will pay out until I die, whenever that might be, is important to me
3. As this is my sole or primary source of income in retirement I am reassured that it will not be reduced if stock markets fall
4. I have a partner who will also be dependent on this pension income, and I am pleased that it will continue to support them if I die before they do
5. I am happy that, although this pension is a reduction in income from the level I earn in employment it is enough to meet my financial needs in retirement

Reasons some people give to transfer their benefits into a flexible pension:

1. My retirement is likely to be a gradual affair and I expect to have varying income needs from year to year, so it is important for me to be able to vary the income I receive from my pension accordingly
2. Unfortunately, I am not in good health and as a result my life expectancy is likely to be below average; I understand that a flexible pension gives greater options for my heirs and dependants
3. I am planning to take early retirement – at least partially – and value the flexibility that a flexible pension can give me in this regard
4. I have a range of financial assets at my disposal to support my retirement, so this particular pension will not be my sole source of income. The guarantees within this particular pension are therefore not important to me and flexible pensions give me more options.
5. I fully expect to manage my various pension and non-pension assets myself and together with my adviser decide where to take income from as appropriate